The Coalition: united they stand - divided they fall?

What do the Tories - and the Liberal Democrats - make of David Cameron's plans
for a second coalition

Mention the prospect of a second coalition between the Tories and the Lib Dems to Bob Woollard, and the response is almost deafening.

“The very talk of it is thoroughly ghastly,” roars Mr Woollard, who earlier this year founded the Conservative Grassroots movement to oppose the Government’s same-sex marriage legislation.

“The Lib Dem tail has been wagging the Conservative dog in this Coalition. Our party should be talking about proper Conservative policies. I am amazed that David Cameron’s inner circle seems to be planning for another coalition already. You simply don’t go into an election planning to lose.”

But that’s exactly what the Tory high command is preparing to do. Mr Cameron has held talks with senior Cabinet ministers over new party rules that would see the final text of another coalition agreement put to a vote among his MPs.

The Prime Minister has endured persistent rebellions from his backbenches over same-sex marriage, House of Lords reform and Europe. If Tory MPs were obliged to put their names to any future coalition agreement – or “dip their hands in the blood”, as one source says – they would be more likely to keep to heel after 2015. Or so the theory goes.

The parliamentary rumour mill has been whirling with talk of what a second Coalition would look like.

“There are plenty of areas the two parties could still work together on,” said a senior Tory aide. “Health reform, social care, pensions. But there are a number of sticking points that make you wonder how we could hang together for more than a couple of years.”

There would be no return to two of the greatest battlegrounds of the first Coalition – Lords reform and an election system closer to proportional representation. Senior Lib Dems realise that trying to push again for their party’s hobby horses would attract derision from the public.

Instead, they will push for a further rise in the income tax threshold beyond the £10,000 threshold to around £12,500, ensuring no one on the National Minimum Wage pays income tax.

It’s an expensive policy, but the Conservatives are much more likely to swallow it than the two other policies under discussion as key Lib Dem demands: a social housing boom or a mansion tax.

By contrast, Europe is not seen as a major stumbling block for a second alliance. “We’re not opposed in principle to a referendum,” says one Lib Dem. “The parties are actually closer on this than outsiders might think.”

Mr Cameron and Nick Clegg will find it harder to agree on policies to satisfy the Tory Right, who feel there is much more to be done on curbing immigration, reforming the welfare state and cutting regulation.

Yet, despite public squabbles over the past three years, those close to both party leaders say that relations are more amicable now than ever. Stronger evidence of the recovery has quelled the jitters of a “triple dip recession” and eased tensions.

Relations further down the Tory party, however, are not so chummy, driving many members into the arms of Ukip. A second alliance could send some Conservative MPs in the same direction, too.

Likewise, many Lib Dem voters remain angry at Mr Clegg’s volte face on tuition fees, and are embarrassed by a partnership with their bitterest enemies.

However, Mr Clegg’s camp hope that if they shout loud enough about what it has delivered in government – the raising of the income tax threshold, the pupil premium to help schools in poor areas and same-sex marriage – the party’s grassroots will have the stomach for another coalition.

This may not be easy, but Mr Clegg – and the Tory leadership – know it is not easy to oust a Liberal Democrat leader. Mr Clegg’s rank and file may have little choice but to endure a second term with the Tories.